Eight of 10 consumers say they have felt food inflation over the past 12 months, according to a new study from Purdue University’s Center for Food Demand and Analysis.
The May 2024 Consumer Food Insights report, a survey of 1,200 U.S. consumers, looks at food spending, consumer satisfaction and values, support of agricultural and food policies, and trust in information sources, according to a news release.
The May CFI survey asked consumers to report their experiences and responses to rising food prices over the last 12 months. According to the report, more than 80% of consumers perceive that food prices have increased a little or a lot during that span.
The Bureau of Labor Statistics’ consumer price index measure of food inflation shows a 12-month increase in food prices of 2.2%, down from 4.4% a year ago.
“While food inflation has slowed in 2024, consumers are feeling the cumulative effect of the high inflation we’ve experienced,” report lead author Joseph Balagtas, a professor of agricultural economics at Purdue and director of the Center for Food Demand and Analysis, said in the release.
The survey included a question asked previously in February and July 2022, seeing how consumers have adapted their grocery shopping in response to food price inflation. Researchers found that the most common shopping adaptations to food inflation are seeking out sales and discounts, switching to cheaper and generic brands, and buying fewer nonessential foods like ice cream, according to the release.
“We also wanted to understand how perceived changes in food prices compare with perceived price changes for other common household expenses,” Balagtas said. “Consumers were more likely to report price increases for food than for any other good or service in the economy.”
When asked which goods and services saw the largest year-over-year price increase, 56% of consumers selected “food,” despite official inflation data that show prices of insurance, housing and child care have risen faster than prices for food in the past year, the release said.
“It’s possible the high frequency with which we shop for food could make higher food prices more salient to consumers,” Balagtas said. “Media attention to food could also play a role.”
The May survey revisited generational differences analyzed in past reports by categorizing consumers into Gen Z (born after 1996), millennials (born 1981-1996), Gen X (born 1965-1980) and boomer-plus (born before 1965).
“One area where we see bigger generational differences when asking about recent consumer experiences is the source of funding that consumers reported relying on to purchase food,” Balagtas said. “Around 37% of Gen Z and millennial consumers report drawing on savings or going into debt to finance their food purchases over the past year compared to 28% of Gen X and only 13% of boomer-plus consumers. It is concerning to see over a third of young adults needing to stretch their finances to afford food.”
Food insecurity is highest among Gen Z adults, with around one-third of consumers from this group also reporting having trouble accessing quality food. This is much higher than the rate of food insecurity among older Gen X (13%), and boomer-plus (5%) consumers, the report said.
“More research is needed, but these results are likely driven in part by a stage-of-life effect, as income and wealth increase are drivers of food security and tend to increase with age,” Balagtas said.
Consumers seem to be overestimating current food inflation, according to the report.
“According to the center’s data, consumer estimates of food inflation over the past year of 6.2% and expectations for the coming year of 3.6% continue to remain higher than the CPI estimate,” Elijah Bryant, a survey research analyst at the Center for Food Demand and Analysis and report co-author, said in the release. “This suggests that consumer experiences with food prices have been different than the official measurement.”
In addition, the dramatic increase in food inflation in previous years may still be affecting consumer food price sentiment, Bryant said.
“However, consumers have been consistently more optimistic about future food prices relative to their inflation estimates over the past 12 months," he said.
Consumers are asked to allocate 100 points among six attributes — taste, affordability, nutrition, availability, environmental impact and social responsibility — based on the importance of each in their grocery purchasing decisions.
“Taste, affordability and nutrition continue to be heavily considered by consumers when making a purchasing decision at the grocery store, whereas environmental impact and social responsibility are of lower importance,” Bryant said. “Americans’ values have proven to be fairly consistent despite changes to the economic landscape over the past couple of years.”
Younger generations place more value on the environmental and social responsibility of their food when choosing what to buy, the report said. Older consumers are more concerned about taste.
The frequency of certain shopping and eating habits also differs across age groups. For instance, younger consumers are more likely to choose nonconventional foods compared to older consumers, according to the report.
“We see this with organic foods, grass-fed beef, cage-free eggs and plant-based proteins,” Bryant said.
However, all consumers, regardless of age, report checking food date labels often.
“We also observe older consumers report eating unwashed produce, raw dough and rare meat less frequently than younger consumers,” Bryant said.
This aligns with differences seen in risk attitudes among consumers of different ages.
“Young adults are more willing to take risks with their food than older adults,” Bryant said.
